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Developers love Tories

Property Developers Love the Conservatives

Cheshire East Council has recently announced that it will give away £1M in grants to housing developers and social housing providers. This is an astonishing admission of the failure of the coalition government’s policy to stimulate house building by encouraging house building on greenfield sites.

This costly initiative shows that the real reason for the flatlining of the economy is that the private sector will not invest because it has no confidence in an economic recovery under George Osborne. People will not commit to spending or borrowing because of uncertainty about our economic future, particularly in the housing sector where the problem is NOT shortage of sites, but the shortage of finance from the banks, who will not lend for building projects. However, we do need new houses and they should be built primarily on brownfield sites where planning permission has already been granted.

The Conservative-led government’s decision to relax planning rules has caused outrage in many areas that have been subjected to speculative planning applications on greenfield sites, making millions for land owners and property developers. Now local Conservatives on Cheshire East Council are determined to give taxpayers’ money to the developers to persuade them to actually build the houses and so stimulate the economy. This interventionist policy of throwing £1m at private developers, many of whom have already made large profits from the increase in land values when planning permission was granted, shows how badly the government’s policies have failed.

A more pro-active approach would be for councils themselves to build the houses we need, a proposal supported by a coalition of leading housing organisations including the Local Government Association which could lead to a national figure of 60,000 new homes being built over the next 5 years. This would not only help address the housing shortage, but also create jobs, stimulate the economy and build council-owned assets for the future. Even Cllr Mike Jones, the Conservative leader of Cheshire West and Chester Council has supported this idea when he said, “With house-building stalled and a lack of finance for development, now is the time to lift the restrictions on local government’s ability to invest in housing to provide the homes we so badly need and to release millions of pounds of economic activity and jobs in construction.”

Cllr David Newton, Leader of the Cheshire East Labour Group, said,

“We recognise that there remains a desperate need for building and development and therefore we welcome the attempt to get things moving so that economic regeneration can take place. However, this £1M spending has become necessary only because of the failure of Tory economic policy. If they had done the sensible thing and adopted the plans inherited from the last Labour government when there was a mild recovery we wouldn't be in the position we are now. Even the Office for Budget Responsibility set up by David Cameron admitted that Labour’s plans would have brought the deficit under control and ensured a reasonable rate of growth. Now, after 3 wasted years of austerity, in their desperation to make things happen the only recourse open to Cheshire East Tories is to borrow Labour style intervention policies! What a humiliating position to be in!”

Cllr Steve Ranger, Labour Parish Councillor for Holmes Chapel said,

“The Labour Party has brought forward proposals to use a levy on energy company profits to fund the building of 100,000 more houses, rather than using tax-payers’ money as the Cheshire East Conservatives propose. Even the government now accepts that far more needs to be done. In my opinion current proposals are not enough. We need to develop a comprehensive housing policy, reversing the effective ban on building by local authorities imposed by the Conservative government in the 1980s. Most of the shortfall in housing can be traced back to the damage that Thatcher caused then by selling off social housing under the Right to Buy scheme. The private sector has proved unable to replace the numbers lost through this policy.”